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Microkia heads for a services story

What will Microsoft do with the Nokia handset business that it is paying $7.2 billion for? How is the deal likely to play out? N Madhavan writes.

india Updated: Sep 09, 2013 01:19 IST
N Madhavan
N Madhavan
Hindustan Times

Three years ago, when I foresaw a marriage between Microsoft and Nokia, it was largely based on two simple premises: 1) Nokia was good at handset hardware while Microsoft was good at software operating systems 2) Nokia and Microsoft had both missed on big opportunities in corporate and consumer smartphone businesses, while the market was still exploding.

It is always fun to look beyond the immediate future, though there are always inherent risks in gazing into the crystal ball in a dynamic world. Now, the next questions are: what will Microsoft do with the Nokia handset business that it is paying $7.2 billion for? How is the deal likely to play out?

My guess is that the focus is shifting to Internet services or the “cloud” and a lot will happen in capturing a big share of the next wave of growth in this.

I just read Ben Bajarin writing in that Microsoft has largely been focused on the business market while being “inept” on the mass consumer market while Nokia has a sound understanding of global consumers. I would agree, despite the fact that Nokia lost out to Apple and Samsung in the smartphone game.

So here is how it looks: Microsoft, which is trying to push its popular Office software to the cloud along with storage and other services under the umbrella of Outlook may find in Nokia not only valuable mobile patents and hardware expertise but also in-depth knowledge and consumer-market related infrastructure.

As Windows Mobile and Outlook consolidate with Nokia’s assets, the next battle in the global mobile war would look more like winnable proposition for Microsoft.

Of course, it must be remembered that Nokia’s Ovi consumer services did not exactly pay off. But that was a captive network. In a world where people want more and more digital freedom anything that smacks of control may not work out too well.

But affordable services bunched up in an open framework may well do the trick. Remember, in Microsoft’s new scheme of things, “gadgets and services” are a single business unit.

First Published: Sep 09, 2013 01:16 IST